Principles of Business, Marketing, and Finance
Wholesalers in a Private Enterprise System
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Copyright © Texas Education Agency, 2011. All rights reserved
Manage the Middle
• Producers use wholesalers to reach
all of the consumers in its target
market
• Numerous retailers
• Easier for a retailer to work
with a wholesaler than
numerous producers
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Copyright © Texas Education Agency, 2011. All rights reserved
Benefits of Wholesalers
• Provide important marketing services for the
channels in which they participate
• Provide one or more of the needed marketing
activities better or at a lower cost
• Combine the orders of several small retailers
and purchases in efficient quantities
• Specialize in storage and inventory
management
• Provide facilities for product storage that
manufacturers do not have
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Wholesaling Activities
Buying
Financing
Selling
Storing
Transporting
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Wholesaling Activities
• Accumulate products of many manufacturers, develop
appropriate assortments for customers, and distribute
the products to their customers
• Assist manufacturers in determining needs of retailers
and final consumers and provide market information to
retailers
• Collect and analyze information on sales, costs, changes
in demand, and inventory levels
• Purchase products from producers and manufacturers
and selling them to their customers
• Assume risk by investing money in products that may be
damaged or destroyed
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Full-Service Wholesalers
• Take title to the products they sell
• Provide a full range of distribution activities
• Provide or arrange transportation services
• Offer Credit
• Provide promotion assistance,
product research, information,
product installation and repair
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Limited-Service Wholesalers
• May not provide services such as research,
credit, or promotional support
• Concentrate on one or two
important functions such as
warehousing and storage,
product delivery, or
accumulating products for
sale in a convenient location
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Agents and Brokers
• Independent businesses
• Provide specialized exchange functions
Locating
Suppliers
Do Not Take
Title to
Products
Selling
Arranging
Shipment
Financing
Extension of
Workforce
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Other Wholesaling Businesses
• Wholesale franchises and cooperativesgroups of small businesses that affiliate because of the
benefit gained from cooperating for marketing and
distribution activities
• IGA
• FTD
• ACE Hardware
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Wholesale Member Clubs
• Sam’s and Costco
• Open to final consumers and
businesses
• Products displayed in large
warehouses
•Limited product assortments are available in
large quantities
•Customers must transport their purchased
products
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Changing Role of Wholesalers
• Large retailer may prefer working directly with
producers (such as a particular designer)
• There are more small- and medium-sized
retailer and manufacturers than there are large
businesses
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Changing Role of Wholesalers
• Access to markets
• Product awareness
• Export and import organization
-important in building international business
• Better communications and information
-improved technology, broader customer service
• Work to identify their customers
-understand their needs
• Learn the problems the customers are having
-with products and marketing activities and help them to
solve those problems
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Specialized Services
•
•
•
•
Marketing Research and Marketing Information Services
Provide Customers with Important Data
Computer Technology to Process Orders Quickly
New Methods for Storing and Handling Products to
Reduce Product Damage, Cost of Distribution, and Time
Needed for Delivery
RFID applications in “smart
mirrors” used in fitting rooms in
department stores. RFID tags
enable interrogation of database
to find complementary items or
locate other sizes or colors.
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Adding Customer Service
• Marketing and Promotional Planning
• 24-Hour Ordering and Emergency
Deliveries
• Specialized Storage Facilities
• Individualized Branding and Packaging
Services
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